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EU Directives

Dáil Éireann Debate, Tuesday - 27 July 2021

Tuesday, 27 July 2021

Questions (19)

Marian Harkin


19. Deputy Marian Harkin asked the Tánaiste and Minister for Enterprise, Trade and Employment if companies operating in Ireland are in breach of the EU Late Payments Directive by exerting undue pressure on suppliers to provide extended payment terms that the supplier does not wish to give or cannot give without jeopardising their cashflow; and if he will make a statement on the matter. [39695/21]

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Written answers (Question to Enterprise)

Late payment in commercial transactions is governed by the European Communities (Late Payment in Commercial Transactions) Regulations 2012, as amended, which gives legal effect to Directive 2011/7/EC of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions.

Under these Regulations it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to late payment interest on the amount outstanding and a compensation payment. The Regulations provide that public authorities must pay for goods and services they procure within 30 calendar days of receipt of a valid invoice or as specified in a contract and that businesses should make payments within 60 calendar days.

Where contracts between businesses exceed 60 days, such duration should be expressly agreed in the contract and should not be grossly unfair. Terms of the contract will be deemed grossly unfair where they purport to waive or vary the relevant payment date where the contract does not specify the date or period of payment or they waive or vary the implied term as to payment of late payment interest. Where the supplier considers the waiver or variation is grossly unfair, they may apply to the Circuit Court for an order under the Late Payment Regulations or to an arbitrator for an award as set out in the Regulations.

Legislation in respect of late payments is principally to protect the supplier and to ensure that where the services or goods have been delivered as set out in the contract, that payment is made within the terms of the contract or as set out in the legislation. I acknowledge that late payments to suppliers can have a negative impact on business cashflow. I can assure the Deputy that officials from my Department will continue through participation in the European Commission’s Late Payment Directive Expert Group to seek ways of ensuring compliance with the Directive.